The hazards of not making a Will

Having no Will can lead to arguments and upset amongst your loved ones, friends and any business partners after you die, just when they are trying to cope with their bereavement. We set out some of the problems that could arise.

Spouses, and partners in civil partnerships, are treated the same for the purposes of Wills. The terms ‘married’ and ‘spouse’ have been used here for convenience. The law in England & Wales is different from that in Scotland and Northern Ireland but, for our purposes, we deal here with the law in England & Wales only.

If you don’t make a Will, the law dictates who gets your ‘estate’ (everything you leave behind when you die), and in what shares. This means you may find the law and your wishes are different. For example, there may be a problem if you or your spouse has children from previous marriages.

If you have a partner but you are not married, your partner will receive nothing under the intestacy rules, no matter how long you have been together. This applies even if you share a home (although your partner may have property rights under other laws, and may be able to claim ‘reasonable financial provision’ against your estate as a dependent in certain circumstances – but this can be expensive and upsetting). Conversely, the intestacy rules may benefit people you would not choose to inherit. Finally, friends, or charities you support, don’t automatically benefit under the rules. The way to be absolutely sure your wishes are carried out is to make a Will.

Another consideration is that when you die, someone must be legally responsible for ensuring your estate is properly administered. This can be a major undertaking: apart from your funeral, your property has to be identified and valued; everyone from banks to insurance companies to the DVLA notified; property, belongings and money collected in; taxes, debts and liabilities calculated and paid; property sold or transferred to beneficiaries and estate accounts drawn up. It can take six months or more to sort out a simple estate, and a year or much longer if the estate is more complex.

If you don’t make a Will, the law sets out the order of people, starting with your closest relative, who can apply to the court to administer your estate.

This may include relatives you would not choose to administer your estate, or who are not up to the job.

But if you make a Will you can decide who will administer your estate by appointing them as your ‘executors’. You can ensure you choose people you trust absolutely, and who are competent and willing to take the job on.

If your estate may be large enough to incur inheritance tax (IHT) when you die you, may be able to reduce that liability by making a Will, leaving more for your beneficiaries. The IHT thresholds are currently £325,000 per person.

If you have young children, it can be tax-efficient to set up a trust for them until they reach 18 or older. This can be done in your Will:

Your executors can act as the trustees.
You can make extra provision for the children (although if you don’t, they may be able to claim ‘reasonable provision’ from your estate).
You can specify that they won’t benefit until they are, say, 25.
You can, if you wish, appoint a guardian with legal responsibility for looking after them generally. This is particularly important if you have a disabled child.
A Will can make succession much simpler if you own or partly own a business. Tax reliefs on the disposal of your business when you die may be available if you plan properly in your Will.

If you own property in another country you will often need a foreign Will covering what happens to it when you die, taking into account foreign succession laws and death taxes. You should also make a Will in the UK, which dovetails with the foreign Will.

If you or your partner lives abroad, you will almost inevitably need to make a Will which takes into account the laws of the relevant country.

And don’t forget that if you have made a Will, a subsequent marriage or civil partnership automatically revoked your Will – unless it is made in contemplation of the marriage or civil partnership.